Never Pay for a Job

I spoke with a woman who wanted to hire me to create a new business development program and learn a financial training program. They wanted to charge me $3,000.00, it was a 50% discount off of their traditional training program fee.. She assured me all national training companies do this. (This is a lie). When I told her I was reluctant to pay for the employment, her tone became harsh and she accused me of "not being serious about success."

Don't fall for this kind of stuff. Any company of any value will pay you, as the employee or contractor to produce for them. Never, ever pay for a promotional kit, business cards, materials or training. It's very profitable for the company and not good for you.

She's right, it's a big investment to select the right people for the right jobs. If they want to operate in business, they should be willing to make that investment.

Don't fall for scams.

Be Ready for Your Sales Rep

When you hire a new sales rep it will take them six weeks to six months to start working on proposals. Shorten that cycle by being ready for them.

On the day they start greet them with an active phone line, business cards, email address, lap top, and a cell phone. If you don't do this, they'll be inactive on the payroll for two or three weeks until they get all set up.

You know their start date when you hire them. Use the time they transition to be prepared so they can hit the ground running on day one.

There's No Magic Bullet

It takes a lot of calls to connect with buyers. When starting a sales job expect to make 100 calls, to find five people that are interested and two that are a potential fit. 100 calls a day should take about seven hours a day.

Of the two prospects that are a fit, you may have to have eight to ten points of contact with the buyers before you get to a decision, depending on the length of your sales cycle.

That's the formula. If you do it, it works. There is not magic bullet.

Right Message, Wrong Audience

If your messages are falling on deaf ears, if your prospects think your price is too high or don't understand your product or service, it's very possible you're going after the wrong target.

Sharpen your focus and see what happens.

Feel, Felt, Found

I love sales. I especially love salespeople who invest in the process and sell with integrity.

I can always spot an old, IBM-trained salesman. They'll talk about the technique of using "Feel, Felt, Found".

Feel, Felt, Found is a memory trick to help handle objections that must've been taught at the impressive IBM sales training programs back in the day.

Here's how it works. The words Feel, Felt, Found are used to handle any objection.

Let's take my favorite, 'the price is too high.'

"Now Jack, based on all we've discussed to this point, I understand you feel the price is too high."

Jack, I can understand why you feel that way. Many of my long-standing customers once felt that way too.

After they used our systmes and analyzed the cost savings this is what they found . . .

Feel, Felt, Found. Isn't it a fun way to remember how to handle objections?

Sense of Urgency

To sell a product or service, it's critical to understand the prospects sense of urgency. Their urgency can be classified in three broad general terms: Even Keel, Trouble, and Growth.

A prospect will make a decision if their business is in trouble or growth mode. For example if you sell computer services and their system crashed, they will make a decision. It may or may not be with your firm, but they are going to buy something. If they are in growth mode, and will hire 20 new employees, again they will make a decision. They will need 20 new PCs on their new employees desks.

Even Keel is the toughest position to sell to. If they are Even Keel their system is functioning well enough, there is no pain, there is no reason to reach for something more or better. They actually may perceive risk to changing. All seems to be working well for them. Unless you can create a sense of urgency or cast a shadow of doubt over their current system, the Even Keel buyer is not likely to make a move.

The Tone of Your Voice

When you are making calls, the prospects and customers only have the tone of your voice to go by. They don't have your appearance, your dress, eye contact or smiling face to connect with. Your voice has to carry it alone.

To make the most of it, speak slowly. Smile when you pick up the phone, the prospect will hear it on the other end. Visualize that the call will go positively and the outcome will be successful. Connect with the prospect, use their name in conversation. Be your genuine self, don't sound scripted. Listen and respond appropriately. Speak normally. Time is valuable, make sure the call is worth their while.

Tape record your calls so you can really listen to how you sound. Do you use 'um, uhh, or other fillers? Do you lack self-confidence or enthusiasm? Are your words enunciated well? Do you use slang?

Do you sound like someone that you'd like to talk to? People make the decision within the first 20 seconds of the call, whether or not they will let you continue. Make sure you earn it.

It's a Bit of a Dance

The sales process is a bit of a dance. It's true of all sales but most evident with a long, complex sales cycle and a high ticket price. The sales person has to remember to bring up the right information at the right time, to know when it's time to listen and when it's time to speak, when to acquiesce and when to be forceful, often with several people that have different world views and objectives.

When it's done well, like a well-choreographed dance, it looks effortless.

Make Sure You Get Something in Return

Many sales people are not skilled at negotiating price. Personally, I love to do it. The negotiation is the culmination of the sale. By this point you should have spent a lot of time listening to your prospect, understanding what they value so that you can match the appropriate product or service feature to what they value. In my opinion, this is where the fun begins.

Some prospects will ask you for a discount. If you have listened carefully and built a strong connection throughout the sales process do not be intimidated by this request and definitely don't drop your price without thoughtful negotiation. If you do choose to discount your price, make the prospect commits to a volume level or a length of time. For example, "sure if you order 10,000 and we can be guaranteed a renewal order next year, I can work with you on the rate."

Do not give a price concession, without getting something from the prospect in return. If you give the product or service away, without eliminating features or changing terms, you will diminish the value you've worked so hard to build.

Here's the key - make sure you document the terms. "We agreed to a volume discount for 10,000 units and a two year term." Make sure the prospect commits to this verbally. Reiterate that you both understand and you both agree to the terms.

If at the time of order, your firm receives a 5,000 unit order make sure to revert back to the original pricing agreement. Do not discount if the prospect does not commit to their end of the bargain. You should be building partnerships with your customers. As partners, require that they live up to their end of the deal. They'll respect you for it.

Supporting Charities

A prospect asked me if it was a good idea to give a 5% donation from the purchase price of her product to a charity for each product she sold. My response is "most companies don't have that much margin to give away."

Turns out she doesn't either. Then you are faced with which charitable organizaton to choose. There are so many worthy organizations to choose from and whichever one you do choose will be a refelction on your company and it's values.

I think it's a really noble idea. I do some service work myself and I really enjoy it.

My suggestion was to have the consumer add a dollar to their purchase price and select the organization of their choice. That way she can still facilitate giving and not affect her profit margins.

Close Ratio & Acquisition Costs

I have procured my first renter from my Chicago Reader ad. I received five inquiries from the ad. Two of the five were interested in renting my apartment. I selected one renter. The close ratio of the Chicago Reader ad is 20%.

The acquisition cost of the one renter is $671.00. I ran the Reader ad for 3 weeks at a cost of $57.00 per week. The renters asked for $100 a month off of the rent. It's a competitive market and there are less expensive places out there.

After pointing out all the selling advantages, I offered a one month $500.00 concession. The renters were thrilled and I am thrilled. I did not have to lower my base rental rate. The cost of the ad $171 + the $500 concession = $671.00 per acquisition.

Many sales people and organizations want to take short cuts. They ask "how much will it cost to get a new customer?" I don't know until we go through this process. There's a lot of thoughtful testing that goes on.

Rather than work the process, some like to fill their pipelines with activity. It feels like you're working hard and are productive. I won't argue with the working hard part but it's not productive.

To me, it feels a bit like a panting dog running around chasing it's tail. I prefer a more thoughtful, targeted approach. We now know from this analysis that the Chicago Reader is an effective medium for procuring renters and well worth the investment. Some of the other channels are worth exploring: a realtor, a rental agency and thoughtful use of Craigslist. Hanging flyers was a waste of time. I'd probably still do it in the future but I won't spend a ton of time on it.

I'll continue placing thoughtful ads in the Reader, for sure.

Names

When you are addressing your prospect, make sure to get their name right. If you're speaking the name make sure to pronounce it correctly. If it's an unusual name, ask for clarification. Your prospect will be grateful that you did. They are used to having their unusual name mispronounced and it may be frustrating to them.

If you're composing an email, double check to make sure you got the spelling right. If you mispell their name, it shows you don't pay attention to detail.

When you're on the phone, remember to say their name at least three times. It feels awkward to you but sounds very reassuring to them.

Here's an example:

"So Gregg, I understand you like our system but are currently in a contract. Is that correct?"

"Yes".

"Gregg, this is my core business and I understand it very well. I'm familiar with competitors' contracts and there's always an out clause. I'd be happy to review it for you."

"I'm uncomfortable with that."

"Makes perfect sense, Gregg. I appreciate your loyalty to your vendor. Let me give you some areas to check for . . . "

Get it? Doesn't it sound so much more natural and collaborative?

That was Then, This is Now

It's true. The credit market has dried up. The banks have called in their loans and changed their terms. We all knew they had the power to do so, we just didn't think they'd every really do it. Surprise.

There's another way to bring revenue to your business, by getting new customers.

Quit complaining about the lack of financing. Get out there, create some value, and sell profitable goods and services to your customers.

If you think it can't be done, look to companies that do it successfully as a model, like Abt Appliances. Appliances and electronics are a commodity. Abt has found their competitive advantage, service, delivery, a fun experience when you go to their stores, thoughtful growth.

It can be done. Go do it. You'll create a powerful, profitable company by bringing in one new customer at a time. You won't need the banks. Won't that be fun?

Handling the Price Objection

Inexperienced sales people are easily thrown by the 'price objection'. If a prospect says 'the price is too high' they crumble and offer a cheaper rate, often at the expense of profitability. There's usually no margin to give away.

I'm working with an insurance broker now. The company he signed me up with is giving horrible service. My broker has responded with "I don't think I can get you a cheaper price." He's not listening. I didn't say I was looking for a cheaper price. I'm looking for service. With the horrible service I'm receiving, the rate actually feels quite expensive.

Many sales reps do this. They offer cheap prices, prices they believe are cheap, and never find out what their prospect values.

If you understand what your prospect values and provide service to meet those values, you'll never have to offer the cheapest price and you'll build a profitable company.

VOiP

I made a phone call in response to an SEO lead for our CRM system, SalesInSync.

I was greeted with a groggy, "hullo?"

"I'm calling in response to your inquiry about our web-based CRM", I responded.

"Oh, I'm in Seattle. It's pretty early here. I haven't even had my coffee yet."

Embarrassed I said, "Oh I thought you were in Virginia, I'm pretty conscious of time zones since I do a lot of work by phone. I thought it was 9:00 a.m.".

"Nope, it's 7:00 a.m. Can I call you in a couple of hours?"

This gentleman is travelling with his VOiP phone. His area code and website indicate he's in Virginia although he can pick up his line any where in the country or even the world. I don't know how VOiP phone etiquette will evolve. Unless business people don't mind being called at any time of the day or night. If they do, they'll need to communicate in some way how they'd like to be reached.

Interesting new technology dilemma, huh?

Listening

Most people think they listen well. The truth is, listening is a skill that must be developed and worked with over time. Even when you are an adept listener you have to continue to question what you are not hearing, to learn what information is under the surface.

Most of listening is not verbal. Less than 10% of what people say is what they really mean. You need to be aware of their surroundings and their body language to truly understand their situations.

In addition, you have to listen without ego. Do not judge the information, do not answer questions for the speaker, do not finish sentences for them.

Do make sure that you are not just waiting for your turn to talk.

A great way to practice listening skills is to talk to teenagers. Try to really listen without judgement and to understand.

Here's an example.

"Hey Johnnie, what are you doing?"

Johnnie "Nothing."

(note: Johnnie is playing a video game while you ask him this question, so he's obviously not doing something. His words do not reflect his actions. As you ask the question note the tone of his voice. Is he saying 'nothing' to get rid of you or curious to see if you'll ask more questions to find out what is really going on with him? It's critical here not to get angry or frustrated and to be open to his answers. If you don't he'll shut down and communication will stop.)

A great exercise to use in any situation is to ask 20 open-ended questions. Open-ended questions cannot be answered with a yes or no answer. You will get much more information than with a closed-ended question. If you do ask a closed-ended question, be sure to follow up with an open-ended question. If you get stuck and cannot think of one, try using the words "Tell me" before any question.

An example is "Tell me how you made the decision to purchase your last software program?"

Two exercises I use in Sales Trainings are "Tell me about the house you grew up in" or "Tell me about the first car you bought". I have one participant ask open-ended questions and one listen and take notes. It's a lot of fun to see where the topics go and what is learned about the person being questioned.

Give 20 open-ended questions a try. You can try it with a business colleague, a friend, a spouse, a child. You'll have fun. I promise.

Close Ratio

As of today's writing, my close ratio on renting my apartment is 0. I have had 16 showings and 0 closes.

My contractor is amazed. He says that all his apartments rent on the first showing. I believe he thinks I am at fault in some way. That somehow I'm less enthusiastic than he is or I'm not pointing out selling features. Although this hurts my ego a bit, it could be true. What also could be true is that this is a tougher economy. He currently does not have any apartments for rent, so he's not experiencing what I'm experiencing. Renters seem to either 1) want to stay where they are or 2) get a very low rent even though the apartment has many upgrades they can't easily find. and 3) There are many apartments available for rent in this market. Some are comparable and some are not.

My Realtor seems to think it's because she does not have an exclusive listing on the apartment. Could be true. She sent me a very thoughtful email on all the benefits of an exclusive listing. I'll be open to next time but this time I had done so much marketing on my own I can't forgo it in anticipation that an exclusive listing will bring me a renter.

At this point, we don't know because we don't have any closes. Our marketing analysis to this point only shows us cost per lead.

My Realtor - 5 leads - $0 (no cost is incurred until there is a close)

ChicagoReader - 5 leads over a 3 week period. $171 ($57 a week) + $70 1 rental application (minus $70 rental application fee was charged back to potential renter) Cost per lead = $34.20.

CraigsList - 0 leads/$0

CraigsList Garage - 3 leads/$0

FreePress - 0 leads/$64 (ran the ad for 1 week. We are $64 in the hole here.)

Posted Flyers- 0 leads/$0

Apt Ppl - 2 leads/$0 (you only pay when they close)

Chgo Apt Finders - 1 lead/$0 (you only pay when you close)

Apt Exchange - 0 leads/$0

At this point, we cannot analyze the close ratio. Our cost per lead analysis says - keep trying creative things with Craigslist, the Realtor is doing great, we need to learn more here about why that is the case, the Chicago Reader seems to produce results, the apartment agencies don't seem to produce as much as you think they would, we need to ask more questions here, the FreePress doesn't seem to be worth the investment, so that's been dropped and lastly posting flyers doesn't seem to produce a thing.

In sales, leads are important but sales are more important. Sure you wants lots of leads but if your close ratio is down, who cares? Getting 10 leads and closing 5 is a 50% close ratio, getting 100 leads and closing 5 is a 5% close ratio. What you want to do is look at the 50% close ratio and increase it. In addition, you want to look at the 5% close ratio and increase it.

It's tempting to confuse activity with productivity. Don't fall into the trap.